Professional Investors Are Preparing For A Stock Market Crash
ETFDailynews.com
September 10th, 2014
David Zeiler: It looks like a growing number of professional investors are preparing for a stock market crash, as hedge fund filings for the second quarter show a spike in defensive positions.
In particular, legendary billionaire George Soros made a huge bet against the market. He increased his short position on the Standard & Poor’s 500 by a startling 605%.
The 9.69 million new shares of SPDR S&P 500 ETF Trust (NYSE Arca: SPY) put options gave Soros a total of 11.29 million shares and made it the biggest holding in his portfolio.
Soros also added significantly to several gold positions, a “safe haven” move that’s typically made when investors suspect a stock market crash is on the horizon.
nd Soros wasn’t the only hedge fund manager making defensive moves.
Several, such as Carl Icahn, increased their holdings in energy stocks, and in particular energy stocks that pay a healthy dividend. That’s also a type of hedge against a stock market crash.
Others have been snapping up 10-year Treasurys and buying more put options than usual.
“You definitely are seeing managers reduce risk levels,” Robert Duggan, a managing director at Skybridge Capital, told The Wall Street Journal. “‘Cautious’ or ‘more defensive’ are clearly things you hear when you speak with managers.”
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